Dan Haar: Tolls letter from executives could sway some thinking

Synchrony Financial CEO and President Margaret Keane poses for a photo inside Synchrony headquarters in Stamford, Conn. on Monday, Nov. 27, 2017. She is among the Fairfield County Business Council members who signed a letter to the General Assembly favoring highway tolls.

Synchrony Financial CEO and President Margaret Keane poses for a photo inside Synchrony headquarters in Stamford, Conn. on Monday, Nov. 27, 2017. She is among the Fairfield County Business Council members who

Synchrony Financial CEO and President Margaret Keane poses for a photo inside Synchrony headquarters in Stamford, Conn. on Monday, Nov. 27, 2017. She is among the Fairfield County Business Council members who signed a letter to the General Assembly favoring highway tolls.

Synchrony Financial CEO and President Margaret Keane poses for a photo inside Synchrony headquarters in Stamford, Conn. on Monday, Nov. 27, 2017. She is among the Fairfield County Business Council members who

Around the first of April, Gov. Ned Lamont stopped off in Stamford on the way home to Greenwich to talk tolls with a hastily assembled group of executives at the Fairfield County Business Council.

The council had long since endorsed highway tolls as the best way to raise the tens of billions of dollars Connecticut needs for transportation, nowhere more than in Fairfield County. Lamont wanted more from this small gathering — CEOs and top-level folks at some of the region’s best known employers.

No, he didn’t need their money. He wanted their support for tolls as individual members and directors of the council.

“He said, ‘This is really critical, I’m betting my governorship here’,” Joe McGee, the council’s vice president for policy, recounted Tuesday. “He said, ‘I need you guys, I need people to know that you as individuals see this issue as important.’”

McGee continued recounting: “I know some of you who are CEOs can’t speak for your companies, but I really need to know that you as individuals are supporting electronic tolls as a revenue source.”

By last week, 10 directors of the council, all well-known in local business and legal circles, and four other council members who happen to run prominent companies, signed a letter to legislative leaders, calling for tolls.

Darrell Harvey, a Darien resident and co-CEO of The Ashforth Co., a multistate real estate development and management firm with 13 million square feet, 1 million in Stamford alone, was among the signers. He’s also a well-known Republican, former chairman of the David Stemerman campaign for governor.

I had spoken with Harvey in March, as the General Assembly’s transportation committee heard public comments on tolls. He’s no fan of higher taxes and fees, obviously. But the numbers for tolls make sense compared with the alternative.

If we need to raise $800 million, we could levy $900 million in tolls, of which 40 percent can come from out-of-state motorists and trucks. The total cost to Connecticut residents: $540 million.

Or we could borrow that same $800 million and pay maybe $1.2 billion for the same money, depending on rates and length of debt issues, with interest paid to Wall Street.

“Give me that deal any day,” Harvey said of the tolls option, compared with borrowing.

Yes, I know it might cost more to collect the tolls, that in-state drivers may pay 70 percent rather than 60 percent. At most it would cost $700 million to have that $800 million in-hand. It’s still not a close call.

It remains unclear whether this letter, not widely circulated in the crunch of tax deadlines and Lamont’s 100th day in office, will change any minds. But it’s part of a push by Lamont on the final turn before the home stretch.

Sometime very soon, Lamont will meet with Democratic leaders and the co-chairmen of the transportation committee to turn three bills into one, unified document.

At the moment, a vote on tolls — quickly becoming Lamont’s centerpiece economic and transportation policy — is too close to call, especially in the House, where all Republicans and some liberal Democrats oppose the idea. Place a bet at the window that Lamont will use hardball tactics to “gently persuade” some of those holdouts — ahem Danbury delegation, I’m thinking of you.

Lamont has already said the number of gantries will now be 50 at most, along Interstates 84, 91 and 95 and Route 15. They’d come up every six or seven miles and would electronically reach into our pockets for a quarter, maybe as much as 30 cents, at each overhead gate. That’s about 4.4 cents per mile for holders of a Connecticut E-ZPass or frequent drivers.

Lamont needs to do much more. He needs to load specific tax cuts or credits into the package. I suggested $175 million in property tax credits against the income tax in March, and that needs to be combined with an equal or greater benefit for lower-income people who don’t pay property or income taxes.

That’s half the amount the state would receive from out-of-state motorists, a minimum dividend for Connecticut taxpayers. Cutting the gas tax a few cents a gallon may work as well, though if the idea is to create incentives for less driving, that’s a bad move.

Lamont also needs to create a detailed spending plan for long-term improvements to highways, bridges and mass transit. It’s not enough to say we need $60 billion, or whatever. Show us the details item by item, not just a list, as the Senate bill does, and not in a document that comes out the day of the House vote.

The point is, if we can agree the state needs to spend the money over the next 30 years, and we can agree that tolls are more efficient than borrowing, then the argument is won. As McGee points out, it’s a matter of trust: Do residents believe the state can spend the money wisely and responsibly?

Clearly, the anti-tolls movement, led by No Tolls CT, says no. Don’t take anything from the anemic turnout of 125 people at a recent Saturday anti-tolls rally. That was organized not by No Tolls CT, but by the discredited Joe Visconti, with a de facto boycott by many Republicans, on a rainy day.

The opposition is real, supported by Main Street businesses and populist Republicans along with a smattering of Democrats. Big business, represented by the executives at the council, is stepping up to the tolls plate.

“Connecticut’s transportation infrastructure needs a reliable revenue stream to assure regular maintenance, enable new construction, and regularly introduce system enhancements, the April 16 letter said. “The experience of states throughout the northeast demonstrates that electronic fare collection - modern tolls - are a reliable way to finance transportation operations and infrastructure investments.”

Signers included James Fitzgerald Jr., chairman of the council and an executive vice president at Wells Fargo Bank; Pamela K. Elkow, the board treasurer-secretary and a partner at Carmody Torrance Sendak Hennessey; and among CEOs, John Garrison of Terex Corp., Rey Giallongo of First County Bank, Margaret Keane of Synchrony Financial, Eric Schadt of Sema4, John Ciulla of Webster Financial. Others included managing partners at large law and accounting firms and the former CEO of Nestlé Waters North America.

The days are over when CEOs call the shots on public policy, but logic matters. “Failure to adopt toll legislation in this session would be an acceptance of drifting economically downward, continuing to suffer a loss of jobs and a drain of talent,” the executives wrote.